Trump is about to SCREW Jerome Powell | Fed in Crisis.

about dollar falls on report

of Trump to name a Fed replacement

early. And I like how they have a photo

of JPAL looking at his watch because his

time's almost up. Except honestly, it

kind of looks like clickbait because it

I feel like the the head of his watch is

actually under his sleeve. So, I think

they they caught him a little early

there. He's got to pull that back. But

anyway, a report that President Trump

may announce a replacement Fed chair by

September or October pushed down the US

dollar as investors saw it as a sign

that early rate cuts will become more

likely. Right? So, basically, there's

this idea that Jerome Powell may get uh

some form of early replacement

announcement, and this early replacement

announcement will end up being

something that undermines Jerome

Powell's credibility, right? Uh so,

undermining Jerome Jerome Powell's

credibility is basically anytime Jerome

Powell says something like, "Yeah, we're

going to wait." If Donald Trump

announces a new Fed chair for next May,

people are immediately going to

interview that new Fed person and

Trump's going to be like, "Go on every

interview you can get." And so, you

know, JPAL might be like, "Yeah, we're

going to wait." And then they'll throw

on Fox News this replacement announced

May 2026 chairperson and be like, "Hey,

well, what do you think?" and he's going

to be like, "Well, I'd be cutting right

now, so we're just going to have to

stack up more rates for when I take over

and I can work with a bed with a with

with the Fed uh, you know, board and and

convince them that what they should be

doing is cutting right now." And so what

you'll do is you'll actually undermine

Jerome Powell's patience and you'll lead

the Treasury market to advance its rate

cuts. The problem is if you start

combining

this earlier rate cut regime from a new

Fed chair, what you do is you actually

lower uh the yields on the bond market

as the market tries to start pre-pricing

those future rate cuts. I mean,

September rate cut expectations just

shot up to 88%. We've almost fully

priced in September rate cuts now. you

know, we were closer to 67 69% just

about four days ago. Maybe closer to a

week ago. It's already Thursday. But

anyway, what's remarkable here is that

if that occurs, then there's the idea

that what you do is you stimulate the

economy by bringing rates down, mortgage

rates come down, potentially, you know,

smaller uh small businesses have easier

access to capital, lower interest rate

expenses, more consumer spending, more

earnings per share for companies. And

the idea is that it should be positive

to stocks uh and that you could actually

start pricing in that positiveness

before Jerome Powell even gets replaced.

That's a great idea, but the problem

with that is

does it potentially undo Jerome Powell's

concerns? See, yesterday on Fox News,

people who never study the Federal

Reserve were like, "Oh, well, I mean, if

if inflation ends up being a problem,

they could just raise rates again." And

this is where you're like, "Okay, even

my seven-year-old child knows that that

would just repeat what we did in the

1970s." This, by the way, shout out to

Max. Max drew this to for me. Look at

that. I'm a daddy. Uh anyway, so if you

repeat what you do in the 1970s where

you just react to every, you know, bit

of data that comes out, you end up

creating this Arthur Burns sort of

scenario where the Fed has no

credibility. It reacts halfaphazardly to

everything. Markets can't predict what

the Fed's going to do, and you actually

end up causing more damage, but

potentially unleashing the very

inflation that Jerome Powell is trying

to prevent. Uh, and then you end up

needing a Paul Vulkar in 2030 or

whatever, and you get another double dip

recession because you repeat the

problems of the 1970s, which would be

very bad because you have to crush the

back of inflation. That's just looking

at history. That's what JPAL's worried

about. Now, is it also possible that we

just don't get inflation? Of course,

because it's also possible that this is

a bigger problem that's on screen. This

idea that inflation is definitely going

to occur, I think, is is

somewhat broken mostly. Like, example, I

was talking to Jack yesterday, my

nine-year-old. I'm like, "Bro, you know,

one of the reasons you're seeing if you

go to uh Segue, I I sorry, I love this

brand. It's a Chinese brand, but we've

got a lot of tariffs on on, you know,

Chinese products right now. And what

we've noticed is when you jump on over

to the Segway website, we've actually

seen a lot of their prices recently come

down uh on on a lot of their products.

So, uh a lot of these have come down,

you know, two 300 bucks, 400 bucks. And

we find that really interesting because

not only do we love the products and the

brand and the hashtag notsponsored,

but we're finding they're cheaper

scooters are all on sale lower than

where they were before the um uh the

tariff disaster. Now, why would that be?

Well, it's probably because a lot of

these companies, like this is one we

were looking at. We were actually

looking at it when it was $1,500 and

we're like, uh, now it's $1199. So, why

are your prices going down? Well, it's

because these manufacturers, yeah,

somebody's got to eat the tariffs, but

what's happening is consumers are

willing to pay less right now. There's

less pricing power amongst products. Uh,

and so one of the reasons could be

because of this. Look at this. This is

the unemployment claims prone to start

rising again. This morning, unemployment

claims were a little lower than

expected. Continuing claims were a

little higher than expected. GDP for Q1

was worse than expected. Nobody cares.

That's all like that. None of that. None

of that was really shocking data.

Inventories a little higher than

expected on wholesales. Retail

inventories were a little higher expect

than expected as well. A sign that

people, you know, stocked up more and

people bought less. Fine. But what's

happening is demand is falling, right?

That's why inventories are higher.

That's why GDP is lower. Now, why is

demand falling? Because people are

starting to wake up to the realization

that their job may not be as secure as

they think. And look what's happening

right now. This just came out this

morning. Warn notices are starting to

spike again. Warn notices, the blue line

over here, uh it generally leads a rise

in unemployment claims. You can see that

best over here in 22 where warn notices

started jumping. And look at that lag.

It was like a threemon maybe I'd say

about three to four month delay over

here uh in in in the rise of the 3-month

moving average which makes sense because

it's a moving average of unemployment

claims relative to uh war notices. So

anyway, I wrote, you know, is this a

one-time tariff related issue uh or is

this the start of a new trend? Right?

Did we get warn notices because of what

happened in April? Or is this the start

of a larger new trend? This is a

problem. But this increase in warn

notices at the same time as the market

is at all-time highs sends you sort of a

contradictory signal. The market's very

happy. The market's not concerned about

the fact that we have zero deals with

any deficit nation. That Donald Trump

has not pulled off any negotiation with

any deficit country. That Japan has

walked away from negotiations. that yes,

we have guard rails for a deal with

China, but we haven't actually

accomplished a deal. Uh, and you know,

when when we get contradictory

information that suggests Trump isn't

doing well, we don't know what to

believe because I mean, look at what

happened with Iran. We obliterated the

facilities.

Of course, you're going to say that

because you're Trump, you know, and then

we get a contradictory report. Well,

that report's fake news, but it came

from the Pentagon. No, it came from a

leaker in the Pentagon. It's fake news.

There was a lowlevel leaker, low IQ

leaker and a scam. And so like that's

the kind of the same stuff that we get

with our trade negotiations. The trade

negotiations are going great. Never

better really. Where are the deals? Two

weeks, bro. Two weeks. You know, so like

at some point we we might we we are

acrewing debt is kind of what we're

doing. We're like a forget the budget

deficit like the the fiscal debt. We are

acrewing momentum debt, right? We're

we're acrewing hope debt. This right

here on the NASDAQ is hope that Donald

Trump is right about everything. But

what happens if we're wrong about what

we were able to accomplish in Iran? What

happens if we were wrong on trade deals

and tariff negotiations? You know,

Europe's talking retalatory tariffs

again. What happens if we're wrong about

the, you know, uh, Iranian desire to

produce a bomb, that we didn't

obliterate their nuclear program, that

they actually have enough enriched

uranium, and that now they're not

cooperating with the IEA,

uh, preventing our, you know, weapons

inspections of their products, uh, and,

you know, tracking of their

highlyenriched uranium, which is hard to

track when they've got, you know,

hundreds of decoys. uh you know what do

you do

uh to to pay that debt? Well, what

happens is you end up with a poopy dupy

in the market. Now, how deep is that

going to be? Nobody knows. But it's

worth paying attention to these warn

notices because these warn notices

together with this report on potentially

announcing an early replacement to

Powell should actually be really good

for the bond market. Now, don't get me

wrong, I maybe I'm biased here, okay?

Maybe we're just shilling the bond

market because the bond market has done

absolutely horribly uh since they cut

100 basis points. So, you know, take it

with a grain of salt. But bond yields,

if JPAL's successor gets announced

early, we start pricing in more cuts. At

the same time we're pricing in more

cuts, we get an unemployment problem

that starts, you know, sending red flags

like warn notices popping up. Yields are

going to plummet. If yields plummet,

you're actually in a great place to

start thinking about. I'm not saying do

it, you know, not financial advice,

okay? Not personal financial advice, but

it does become very interesting to start

thinking about bonds, mortgage

companies, uh, you know, like think like

a rocket mortgage, buying Mr. Cooper,

buying Red Fin, getting exposure to

those higher yield mortgages, but also

mortgage servicing rights, which during

refinances are obviously going to get

replaced. But because a company like

Rocket Mortgage has these servicing

rights, you would expect a lot of the

refinances to just go right through

Rocket. Uh that's why a lot of these

companies like mortgage servicing

rights. Not always, uh, you know, 100%

true. uh because some people will go to

their their you know local lenders or

their loan officers that they have a

relationship with. But that said, you

know, the MSRS could just end up right

back at um uh at Rocket Mortgage. So,

who knows? You know, the last time some

of the unemployment numbers started

freaking out was right here. This was

the last time we had the unemployment

scare and you can see what happened. The

10-year Treasury collapsed to 3.6. But

then on Trumpopium on on unemployment,

you know, yields skyrocketed to 4.77%.

Is insane.

Now we're starting to look at, okay, is

the debt going to come due again? And

it's interesting because it combines

with this talk about, you know, Trump

lashing out at Powell, calls him Mr. Too

late. Uh, you've got dollar weakens as

Trump eyes Powell successor. What do we

got here? We've got dollar fell.

Treasuries rallied after a report that

Trump is considering naming Federal

Reserve chair uh Chair Powell's

successor well before Powell's incumbent

term is expected to end in May. Uh

speaking about something ending, uh the

coupon code JPOW is going to end soon at

mekevin.com. We have the lifetime option

out again. You know, sometimes we've

actually gotten quite a few emails from

people who are like, "Hey, you know, I

got the monthly subscription. I've been

loving it, but I'd actually prefer to

have the lifetime option because, you

know, I've got course members from 2017

that are still coming to the live

streams that paid in 2017 and they

haven't paid another dollar since then.

It's kind of crazy. Anyway, Wall Street

Journal, see that at mekevin.com. Wall

Street Journal said Trump may reveal his

pick to run the Fed by September

October. Might even be sooner, honestly.

Uh, the report follows weeks of lobbying

by the president for Powell to lower

borrowing costs. Investors and analysts

reckon Powell's replacement will most

likely share the president's dovish

bias, prompting speculation that

interest rates could eventually fall

faster and deeper than markets are

currently pricing. Totally reasonable.

Mind you, it is probably the right

thing. So, like even though I understand

Powell's concerns, I personally don't

think we're going to have an inflation

problem. I actually think we're going to

have a deflation problem and a jobs

problem. I think AI is going to make

unemployment

never okay for like the next 50 years

get as low as the 3% we saw postco

it's not good you right anyway uh Marie

Daly from the Fed's talking right now

says muted tariff impact may open the

door to a cut in fall daily said she

sees increasing evidence that tariffs

may not lead to sustained inflation Mary

Daly of Fed just now that's actually

big, right? I mean, this is this is the

they're all applying for Jerome Powell's

job. Let's be clear about that. But, uh,

seeing increasing evidence that tariffs

may not lead to a large or sustained

inflation surge, uh, may open the door

to cuts in fall. Uh, labor market is

slowing. Okay. Interesting. So,

we know these things. We see the

warnings. We see the lack of demand at

companies and if you're paying

attention, you really don't see

inflation showing up in consumer prices

even though JP's worried about it. He's

right to be worried about it because of

the 1970s.

But Trump's also right in this that we

should be cutting. So it's it's

interesting like only when you look at

the granular nature of it do you

understand why Powell's doing what he's

doing. There's increasing risk that

Powell will become a lame duck in his

final months. And with it, the risk that

earlier interest rate cuts will come. A

lame duck, Powell. Potential contenders,

Kevin W, Chris Waller, Kevin Hasset,

even Scott Bessant.

Traders have been adding to bets of US

cuts. The chance of a quarter point cut

in the next meeting rose from 0 to 20%

and now we're at like 87% or something

for uh cuts in September. 88 somewhere

around there. Wages and lower rates are

also weighing on the dollar, right?

Because as rates come down, the desire

to buy US treasuries potentially goes

down. Uh and um uh and and and then you

have less buying pressure on on

treasuries because yields are lower. So

therefore, you need to buy less or fewer

dollars rather. And let's see here.

Let's see. We've got Fed officials

including Ghoulspeed, Barkin, Dailyaly,

Hammock, and Bar are also set to speak

soon. That's fine. Dy's talking right

now. Powell reiterated his me message

that officials do not need to rush.

Trump's behavior in terms of

appointments to the Fed has been

reasonably orthodox. Okay, Trump shill.

Uh, let's see. This suggests Washington

is seeking to assert more control over

monetary policy. I mean, Trump is to

some extent a populist, right? Like

lower rates are popular. You could sell

that as like, oh, it's good for our

debt. But, uh, it's also very popular

because if Trump can cheer, look, I got

rates from 4 and a.5% down to zero. Even

if we go through a recession to make

pull that off,

he's going to he's going to cheer it and

I wouldn't blame him for it. I would

cheer too if I were in his shoes, right?

So, you know, remember, my goal is to

poop on everyone because I don't want

any friends. So hopefully that that uh

explains my political bias is I hate

everyone. Uh okay, that gives us a

little bit of an update on Alfredo. Why

not advertise these things that you told

us here? I feel like nobody else knows

about this. We'll we'll try a little

advertising and see how it goes.

Congratulations, man. You have done so

much. People love you. People look up to

you. Kevin Pra there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.